Strong rise in consumer confidence
The Society’s Consumer Confidence Index rose by nine points in November – the largest monthly change recorded since the index was launched. After three consecutive monthly falls, which saw the index fall to its lowest ever level in October, it now stands at 101 – just one point away from the long-term average of 102.
Consumers are more optimistic about the housing market with significantly fewer respondents expecting house prices to fall – 9 per cent compared to 19 per cent at the start of 2005.
The Consumers’ House Price Forecast, which looks at the next six months, has risen from 1.2 per cent in January and 2.9 per cent in October to 3.1 per cent in November. Nationwide said the increase in confidence reflects consumers’ belief that a soft landing has been achieved.
Nationwide’s commercial and communications director, Stuart Bernau, said it reflects a return to more comfortable levels rather than suggesting confidence is soaring. “It appears that negative sentiment caused by recent higher petrol prices, fears over house prices and other factors has dissipated. More upbeat sentiment may stem from more positive news on a number of fronts and may also reflect greater optimism in the
run-up to Christmas,” he added.
But Rod Murdison, proprietor of Murdison & Browning, said: “It’s very hard to judge consumer confidence surveys. For what it’s worth people may be feeling more confident as neither house prices, interest rates or unemployment figures have rocketed. There’s been the first mention of a future withdrawal from Iraq and we’ve been able to count our blessings in that we’re not likely to suffer from hurricanes or tsunamis.”